News

Holden escaped 'near-death' experience

Steve Colquhoun, drive.com.au, August 5, 2009

Prominent politicians have revealed just how close one of Australia's three remaining car makers came close to going under as its parent entered bankruptcy.

Holden escaped a "near-death" experience when its parent company, General Motors, went into bankruptcy earlier this year, South Australian Deputy Premier Kevin Foley has told a press conference assembled to announce new fuel-efficient V6 engines for the company’s Commodore range.

As reported by Drive.com.au, Holden has added a 3.0-litre V6 engine to its Commodore and combined it with a six-speed automatic transmission to deliver fuel efficiency improvements of 12 per cent.

Mr Foley, whose constituency includes Holden’s Adelaide manufacturing plant where Commodores are assembled, said a massive injection of funds from the Federal Government’s Green Car Innovation Fund to build the Holden Cruze small car had probably saved the company from going under.

"We are not out of the woods, but we’re a decent way down that path," he said.

He paid tribute to Federal Industry Minister Kim Carr and Holden managing director Mark Reuss as the architects of the company’s continued operation under the restructured umbrella of "new GM".

"If it had not been for the stroke of luck that an Industry Minsiter like Kim Carr came along with the ability to secure half a billion dollars in funding from his Federal colleagues, and the arrival of someone as talented and as driven as [Holden chairman and managing director] Mark Reuss, we wouldn’t be here today," he said.

"It has been a near-death experience for Holden, but it has bounced back in the most aggressive and the most successful manner possible.

"To have had a managing director who has been able to convince [General Motors headquarters in] Detroit in its darkest days to invest in a new vehicle in Australia is a remarkable achievement."

Mr Carr said he was proud that the fund he helped to established had played a pivotal role in saving the iconic Australian car maker.

"Holden could have asked for funding for several programs. (The Cruze program) is the program that Holden chose because that is the highest level of investment they could seek internationally," he said.

"We had to build a business case around a whole new car at a time that the whole company was facing bankruptcy. It made the difference between if General Motors Holden stayed in the new GM or went the way of (GM European affiliate) Opel. We made that difference."

Mr Reuss said he was unsure just how close he came to being the man who presided over the proud company’s downfall.

"You never really know (how close) because as things digress with the parent company and we moved towards that date of the Chapter 11 (bankruptcy proceeding) filing, you don’t know," he said.

But I can tell you, you leave nothing on the table to prevent anything from happening to an entity like this, and that’s what this team did. We left nothing on the table.

"That’s why you’re seeing some of these re-investment projects, you’re seeing the new car (Holden Cruze), you’re going to see export programs come back into that plant, you’re going to see things we worked incredibly hard on come to blossom in the next few years. We never want to be in that place again."

He said he was confident the company could turn a profit on the Cruze, and said the car had sold strongly in its first month on the market.

"We better make a buck out of that four-cylinder car, absolutely. That is the business case we sold, and it’s the business case that’s on track," he said.